Hired guns sort it out

Interim chief financial officer Bill Ross says someone in his position can have a major impact. Picture / Glenn Jeffrey

Unofficially they're called guns for hire. Officially they're professional contractors or interim managers - skilled senior managers who work short-term to bring about change or help a business through an important transition such as a major audit or public float.

Executive recruiters say interim managers get the "hired gun" label through being decisive and action-oriented, and because after working hard and fast for a short period they usually exit the company to make way for a more relationship-oriented manager. But occasionally, an interim manager will take on the role of chief executive.

Bill Ross, interim chief financial officer for Express Logistics, says that when an interim chief executive is appointed to a business the impact can be major. "In one, the company wasn't confident about appointing internally and in the other they needed a specific kind of person to drive change. It does take a hard-nosed kind of hired gun to clean a place out, but usually such a person is not so skilled at long-term management."

Although many large organisations will recruit a chief executive from within, medium-sized companies may turn to a recruitment agency with an interim management division.

Of eight executive recruiters who were asked if they had placed an interim chief executive within New Zealand, more than half said they had.

"We have several recent examples of interim chief executives we have placed," says Suzi McAlpine of OCG Consulting.

Richard Manthel, managing director for Robert Walters, says: "While there are more interim management opportunities at the next level down, appointing interim chief executives is a common trend internationally, and I have placed an interim chief executive in a small New Zealand telecommunications company."

Manthel says interim chief executives need a well-established track record and are usually appointed to provide stability to a board and external shareholders.

But Peter Harbidge, general manager for Hudson New Zealand, says placing an interim chief executive is an unusual practice and indicative of poor succession planning.

And Maurice Ellett, managing director for Executive Search International, says most companies would rather use a knowledgeable internal executive as acting chief executive.

Professional director Peter Lockie, who specialises in second-level interim management, says organisations that want an interim manager tend to be in one of three stages of transition - start up, shut down, or restructure because of growth. He says as an interim manager he has the authority to effect important changes compared with a consultant, who might just hold the fort.

"In New Zealand, over 70 per cent of businesses are small and may lack the financial resources to employ a senior manager on a fulltime basis. Interim managers bridge the lack of expertise that may exist in corporate governance compliance and risk management," Lockie says.

David Jones, managing director for Robert Half, says the demand for financially skilled interim managers, particularly qualified accountants, is outstripping supply and New Zealand interim managers can double or treble a permanent salary if they choose to work overseas.

"In the past five years the age profile has been dramatically pushed down as the demand has gone up," he says. "We are beginning to see younger interim managers, and those employed in HR, marketing, and engineering as well as traditional finance roles."

Sometimes employers engage interim managers as a "try before you buy" opportunity, and Ellett says interim managers often fall on their feet.

"I have known interim managers who are offered the role on a permanent basis because the manager likes the way they fit in, work and relate."

But is it all flexibility, opportunity and big pay-packets? What are the downsides?

Ross, a chartered accountant who has worked as an interim manager for the Newspaper Advertising Bureau and travel company Gullivers, says permanent staff are less inclined to get a relationship going with an interim manager, and lack of job security is another reality check.

If he needs leave or becomes ill, he is not paid for that time. And he must think about legislative requirements because interim managers are self-employed. He agrees there is a strong demand for interim managers, but says that job continuity tends to be a "famine or feast".

"There was time in 2004 where there wasn't a great deal of work, but since then there have been a couple of enormous changes in international reporting standards which are sucking up talent. Interim managers will always be needed for company acquisitions, IT implementations, downsizing and change management."

WHAT'S AVAILABLE AND HOW INTERIM MANAGERS RATE IT

Trends:

Interim managers tend to be highly senior people and close to a profile of partner or director.

Globally, the average age of interim managers is falling.

The average length of a project is six months, but projects can be as long as 18 months or as short as two months.

Interim management is better established and understood in Australia and Britain than in New Zealand, where it is still a relatively new concept.

Statistics:

Of 112 Australian interim managers surveyed by Robert Half between January and May, 67 per cent were men, 46 per cent were aged 31 to 40, and 63 per cent said there had been an increase in job opportunities.

The most common reasons for choosing interim management as a career are: to broaden skills and experience; to enjoy a better lifestyle; to give employers a "try before you buy" opportunity; to make better money.

Fifty-two per cent said it can take four weeks to find work after a project ends. During that time, 15 per cent are offered an average of two jobs; 7 per cent, one job; and 4 per cent, two or three jobs.

About 75 per cent select an interim management opportunity on the type of project. Remuneration, project duration and the type of industry sector are other considerations.

Only 4 per cent would not consider returning to the permanent workforce at all.

In Australia, "professional contractor" is the most common term used to describe their work.